Can Greece legally withdraw from the Euro?

There has been talk for some time among commentators, economists and politicians of Greece leaving the eurozone as a possible solution to the Greek debt crisis and to any further damage to the eurozone as a whole. However, on 23 May 2012 an informal European Council meeting on growth discussed the political and economic situation in Greece, concluding that it wanted Greece “to remain in the euro area while respecting its commitments” and that it was “fully aware of the significant efforts already made by the Greek citizens”.

It is not clear how the Greek debt crisis can be resolved, but a legal Greek withdrawal from the euro would not be as straightforward as some observers seem to think. There is no provision for this in the EU Treaties, which form the basis of Economic and Monetary Union, although there is a provision in Article 50 TEU for a Member State to leave the EU altogether. This would allow the exiting State to leave the eurozone, but it would not be a quick or easy procedure and it would involve a renegotiation of Greece’s relationship with the EU, probably with a view to Greece later rejoining the EU.

This note looks at the Treaty base for EMU and some of the informal suggestions as to how Greece might legally leave the euro and/or the EU.